Nam Tai Elec. (NTAI) Message Board

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Technology Stocks : Nam Tai Elec. (NTAI)

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To: Dick Martin who wrote (1549)	2/10/1999 3:59:00 PM
From: Ron Bower	Read Replies (1) of 1696

Albatronics had a loss of HK$54.5M from operations. With HK$800M debt they were likely paying at least HK$80M interest. Trying to operate without working capital loses efficiency and decreases profits. Without the debt, they would have been generating an operational profit. It is likely that Namtai has assured customers that they will guarantee delivery from their own operations. In 1998, Albatronics had over US$209M revs with many customers pulling away from the company because of it's financial condition. Liquidate Albatronics - Namtai has taken the loss on it's books - pick up the customers, add US$150-200M revs. At 10% margin, $15-20M to bottom line. Namtai was operating around 50% of capacity so the margin would likely be higher. Price will remain weak over the next 3-6 months, possibly longer with this past Q on the reports. At some point it will be a very good buy. I am staying with Deswell. If I'm right, their Jetcrown Division will likely pick up the plastics business of Namtai. They just added new mold making machines because they are at full capacity. Namtai/Albatronics may be the reason. JMHO, Ron

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